Build-to-Rent and Planning Permission

Build-to-Rent and Planning Permission

According to research by Savills the number of completed Build-to-Rent (BTR) developments was up 29% annually at the end of Q4 2018, with the number of under-construction developments rising by 39% on 2017, and an additional 10% in the planning stages.

To encourage more BTR developments, the planning process has been simplified. Here’s how:

Longer Tenancies

As the norm developers of BTR complexes offer 3-year minimum tenancies to all new tenants eligible to live in the country over that period. There’s no obligation on customers to take up the 3-year agreement, and they can request alternative tenancies of 6 months, 1 year, or 2 years, if they prefer. Residents shouldn’t be locked into longer tenancies, and ought to be given the option to terminate with 1 months’ notice, after the first 6 months, without a break fee being payable.

Affordable Homes

The benchmark for the level of affordable housing on BTR developments is 20% and should be provided by default in the form of affordable private rent. Generally, this proportion is viewed as a means of providing balance between the provision of homes the local authority wants, and an acceptable return on investment.

Local authorities can set a different level, but evidence needs to be provided by the authority from a local housing and need assessment. By making a case on the grounds of financial viability, developers can also seek to meet affordable housing requirements through commuted payment in lieu of on-site provision.

Affordable Private Rent (APR)

Affordable private rent is a unique category designed for BTR developments, set at 80% of market rent. Eligibility to occupy private rented homes should be determined with regard to local household income levels and their relation to local rent levels. This should be agreed by the local authority and the scheme operator.

Additional Minimum Standards

There’s no requirement for local authorities to apply national space standards in their area, as they’re optional, and can be dis-applied from certain development types, such as BTR schemes. However, purpose-built rental homes are designed, constructed, and manged to a high quality. Both affordable private rent and market rent homes should adhere to identical standards, with all residents benefitting from the same amenities, including gyms and communal work and leisure spaces.